Sunday, November 30, 2008

AT&A position on Net Neutrality leads to Questions

As we move closer and closer to the realization that Internet is a Utility, then we must realize that usage-based pricing must prevail. Combined with open access to Content providers, this will finally allow consumers to be the determining factor in fair and reasonable pricing. When consumers can select Content a la carte, and choose the provider based on the best “value package” combination of pricing and Content selection, then true net neutrality is achieved. Anything less is just more industry control. But, not forcing the FCC to adopt reasonable Access rules, including reasonable pricing, will only achieve more industry control of pricing. Industry-cable and telco, and now wireless- have always had reasons to be restrictive in Access. No more. Wireless provides one avenue to deliver Content with full bandwidth and consumer choice. Usage-based pricing, if determinedly regulated open access to Content providers, offers the best chance for consumers to get the widest choice of Content at the most reasonable price. We’ve too long allowed cable and telco to restrict access. Forcing separation of Content and Infrastructure, as we did with TV in the 60’s, opens up the possibility of greater Content choices for less cost to consumers. If you believe that Anything, Anytime, Anywhere is the grail of Consumers regarding usage and content; that a Universal Connect Appliance is coming, then it must follow that usage-based pricing with reasonable access open to Content providers of all stripes, is the best way to ensure maximization of satisfaction. Industry should be required to take reasonable risks for reasonable rates of return, that’s a free market system. The jumble of monopolies and regulatory favoritism must cease in respect of open access. Since when did we decide to reduce risk for industry by providing regulated monopolies, in favor of overcharging consumers(some $200 Billion plus-that’s Billions with a big “B” folks-since the eighties)? Would the cable industry have never gotten started without monopolies to reduce risk and insure profits? In most other countries, governments did not provide subsidies to build, favorable tax rates and so on, but we did here. That’s not a free-market-based system, it is a system of politically rewarding a chosen few, whereas open competition would have led to more choices much earlier than today.Even allowing for the political atmosphere of wanting to encourage cable build-outs to service consumers, cable has long ago recovered their investment, and lots more! Fourteen other countries have greater broadband penetration at less cost! We can, and must force open access for Content, separate Content from infrastructure provisioning, and develop a business model that is usage based. Some of us remember that the early days of TV were a problem for TV Content providers, who didn’t have an audience until someone bought a TV. When TV penetration became widespread, then Content competition created channels, choices for consumers. There are obvious lessons for the current Content industry, including communications, entertainment, business, education, health and more. There are great opportunities for Content competition, greater consumer choices and benefits, and much more. Usage-based pricing, combined with force reasonable access, is the way. Infrastructure can be compensated with reasonable rates of return for their investment in infrastructure, but in today’s market they want to have it(the access to the consumer and high profits) and eat it too (restricted competition). That’s not the American way!
Posted by Mediaman at 19:54:20 | Permalink | No Comments »

Wednesday, April 23, 2008

Net Neutrality only works without cable and telco Content monopolies

I have noted in the past about the “tipping point” the point in time where demand exceeds capacity. It now appears that the largest telco agrees with me, and others, that the time is near.
Verizon and others haven’t invested all that money in fiber optic infrastructure because they believe it is a public service; they’ve done it to make a profit, and profit (big time) they will.
Net Neutrality is a bad concept in that it interferes with the marketplace. Better that Net Neutrality should be used to define the concept of “neutral access,” access allowed to any and all Content providers on a reasonable-cost basis.
Infrastructure must be separated from Content provision; this means Cable, Telco and satellite, WiFi, Powerline and other infrastructure must be weaned away from their monopolies, by force if necessary, to allow a la carte Content providers reasonable access to infrastructure.
Who pays? Cable and telco would like their ownership of infrastructure to give them the same monopoly profits as cellular provides; that is charging “both sides” for usage of the infrastructure. And maybe that will work, if there is a truly competitive marketplace from which to source the Content you want, when you want it.
I believe that if infrastructure is separated from Content, that bandwidth metering will become the normal standard for charging consumers, who will make choices of what Content they want, when they want it, and where. It isn’t so hard to see a business model wherein the new “Mission Impossible 5″ is offered to all comers as a new Release Pay-Per-view on the Internet, say at $7.00, $10.00, even $12.00 for a viewing household. It doesn’t take a math genius to see that even 20,000,000-30,000,000 million households would subscribe, just in the U.S., leading to a minimum gross of $140,000,000 plus!, up to $360,000,000 plus or more. People would gladly pay, with the difference in cost being absorbed in the gas, popcorn, candy, and soda savings.
However, that does require a slight (sarcastic joke)increase in bandwidth.
Net neutrality unfairly penalizes consumers and minimum-level Content bandwidth users by assuming that Content A is more, or less, valuable than Content B. The problem of bandwidth capacity, which is what leads to this discussion in the first place, can be cured by merely allowing the infrastructure providers to invest in their highly profitable future by adding to bandwidth. It is no accident that 13 other countries offer higher bandwidth penetration, at lower costs, than the U.S.
Now there’s a place for Congress to get busy! How could that happen? Could it be that the monopoly infrastructure we have allowed, and the “asleep at the switch” regulatory authorities have allowed the infrastructure providers to get too big, haven’t forced competition, haven’t forced “reasonable access” to Content providers?
Cable has enjoyed over $200,000,000 Billion EXCESS profits (that’s Billions with a big “B” folks) in the last twenty years because of allowed monopoly. If you really want an Internet that works for you, get your friends and neighbors, your legislative representatives, to take a hard look at the numbers. Hold their feet to the fire of the voting booth and don’t let lobbyists and contributions buy them off.
A free market really works when it is free, and not manipulated by special interests, and as currently exists, monopoly participants.
Posted by Mediaman at 21:31:23 | Permalink | No Comments »